Tom DeMark says charts show early signs of market top

According to Tom DeMarks charts, Dow is on the verge of reaching his topside.

The first reason is the comparison with the bottom from June 2016. At that point, DeMarker counted 13, which ended the corrective movement. That showed, that the declining trend was tired and cannot keep the bulls from taking the upper hand. As it is seen on the charts, since then, the index is moving in an increasingly strong up trend. The second 13 came just before Dow reached 20,000. But it was a different story then. The rising movement has just began, and the bulls were benefited by the “Trump Trade”. Recently, Dow reached the projection of 22,280, where the indicator counted 13, after which it continued to count only to reach 12.

This shows that the trend is tired and the movements are not as powerful, as they were before the 20,000 mark. Most of the indices counted 13 as well, and the market hasn’t had a correction of 5% or greater for a long time. This is making investors cautious, that the bulls are running out of steam.

Another factor, which makes Tom DeMark think, that markets are reaching their top is, the comparison of DeMark’s current levels and those from the period of August – October 2011. If you invert the chart it is almost identical. That means that the trend could easily revert.

According to Tom DeMark, it is possible for a slight dip at first and then another bull run, however the potential risk is far greater than the reward.

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov

 Varchev Traders

Read more:
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance